For Immediate Release - June 02, 2006

State Urges Coastal and Flood-Prone Property Owners to Consider Flood Insurance

State Urges Coastal and Flood-Prone Property Owners to Consider Flood Insurance

As hurricane season begins, the Office of Consumer Affairs and the Division of Insurance are urging that coastal and flood-prone property owners look into purchasing federal flood insurance coverage from the National Flood Insurance Program.

Standard homeowner insurance policies do not cover flooding and fewer than 45,000 Massachusetts homeowners had flood insurance when a week's worth of rain last month generated devastating floods in many communities in Eastern Massachusetts.

"As we saw, it doesn't have to be hurricane season and you don't have to live near the coast. Flooding can occur just about anywhere. I'm advising homeowners to consider flood insurance to protect their assets," said Janice S. Tatarka, Director of the Office of Consumer Affairs and Business Regulation.

Accuweather forecasters have predicted that the East Coast north of the Mid-Atlantic states could see a Category 3 hurricane resembling those that struck New England in the 1930s and 1950s. Typically, the threat of a hurricane striking New England occurs in late summer.

Massachusetts Insurance Commissioner Julie M. Bowler commented that the events of the last month should be a financial wake-up call for homeowners. "Flood insurance not only offers greater financial protection to homeowners but it reduces the financial burden that taxpayers must shoulder in assisting uninsured flood victims," said Bowler.

According to FEMA, the average annual cost of a federal flood insurance policy in Massachusetts is about $800, but lower cost policies are available to homeowners in moderate and minimum flood hazard areas.

IMPORTANT FLOOD FACTS YOU SHOULD KNOW:

  • Your homeowners' policy does not cover you for flood damage.
  • You don't have to live near water to be flooded. Approximately 20-25% of all flood insurance claims come from "low-risk" areas. Floods are commonly caused by storms, melting snow, dam or levee failure or water backup due to overloaded drainage systems.
  • Flood insurance is affordable in relation to the cost of flooding. The average policy costs around $800 annually for coverage to the structure and contents.
  • Flood insurance claims are paid even when a federal disaster is not declared.
  • Increasing the number of properties with flood insurance significantly reduces the financial burden placed on federal and state taxpayers following a flood disaster.
  • Flood insurance claims are paid with premiums collected, not taxpayer dollars.
  • Your mortgage company or bank may require you to carry flood insurance, but it is your responsibility to maintain adequate coverage limits.
The National Flood Insurance Program makes federally backed flood insurance available in communities that agree to adopt and enforce floodplain management ordinances. In Massachusetts, over 330 communities participate in the program. Consumers who wish to learn more about the National Flood Insurance Program may do so online at www.floodsmart.gov or contact their local insurance agent or insurer for more information.